Page 207 - RISK Management IC 86

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over to B to avoid the risk associated with A
obviously would be far more expensive than having
employed method B from inception.

So we see, before any major investment project is
undertaken, it should be subject to a full risk
appraisal. Not only is it cheaper to avoid risks at
that stage, but also it is more economic to build in
many risk reduction devices during the construction
of the building and plant can have to make
modifications later.

(ii) Costs of Risk Avoidance - sometimes it may be
possible to undertake some avoidance of risks
without undue difficulty or expense, but it is never
cost less. The costs and the various forms like (i)
monetary costs - such as additional bank charges
for paying wages and credit transfer them to avoid
the risks of paying in cash. (ii) opportunity costs -
such as the income forgone by abandoning the
production of certain hazardous product. (iii) direct
and indirect costs - so in the case of the changeover
to payment of wages by credit transfer extra bank
charges would be the direct costs and further

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